Portfolio management: aligning projects with the company’s strategic goals

Alignment between projects and strategic objectives has become essential for success.In a market that leaves less and less room for error and room for experimentation without design vision, portfolio management has become an indispensable practice to ensure both the best possible management of resources and that every corporate asset is put to value. Indeed, when projects are developed in harmony with the company’s strategy, a virtuous cycle is created that promotes its effectiveness and responsiveness to changing markets.

Advanced tools such as SAP Enterprise Portfolio and Project Management, in fact, facilitate effective oversight of product and project portfolios, ensuring that each activity is truly aligned with business objectives. In addition, a centralized and coordinated management system makes it possible to monitor activities and quickly adapt them to the changing needs of an increasingly tumultuous market. Establishing an effective corporate portfolio project management policy also helps from the point of view of the workplace experience: when goals are clear, shared and measurable, in fact, misunderstandings and frustration can be avoided, and it is possible to make sure that each of the employees is clear about his or her task and value within the project.

Portfolio management, like any digital transformation activity, however, is also closely related to both technological innovation and change management. So how can it best be implemented?

Corporate vision at the heart of Portfolio Management

To align a project portfolio with the company’s strategic goals, it is critical to have a clear corporate vision and mission. Then, goals must be analyzed and defined so that they provide clear and measurable direction, integrated into the project portfolio management process.

For example, if the goal is to produce a patentable product, all projects should support this specific goal, from engineering to prototyping. Orchestrating efforts so that there is a shared direction is the central node, which makes portfolio management a useful and functional activity.

Success requires a plan

Having a clear and shared vision of strategic goals is critical, but it is only the first step in a journey. For the grounding of the projects, but especially of the ultimate goals, it is necessary to take a systematic approach in the evaluation of project opportunities, in which informed decisions play a key role. In defining effective planning for the project portfolio, numerous variables must be considered, such as available resources, time constraints, and organizational capacity.

One of the most critical steps in this regard is establishing priorities. One must be prepared for complex decisions, including choosing to abandon projects that do not achieve expected value. Tools such as cost-benefit analysis and the use of KPIs enable one to do this intelligently, effectively, and most importantly data driven. Integrating a platform such as SAP Enterprise Portfolio and Project Management greatly facilitates this process. The Portfolio Management System enables an overview that harmonizes projects and business strategies, thanks in part to monitoring tools and dashboards that quickly identify the performance and progress of each individual project.

Identify key projects

Every company has its own priorities, both strategic and, so to speak, field priorities. Ongoing projects cannot always be managed in a similar, parallel or equally resourced manner. In addition to having to be carefully selected based on its ability to support the company’s strategic goals, each project must have the appropriate amount of resources allocated to it based on its strategic importance. This involves a conscious assessment of priorities. By using tools such as SAP Enterprise Portfolio and Project Management, the company will have all the analytical tools it needs to examine the alignment of projects with overall objectives in a clear visualization of the resources needed and the expected results.

Project monitoring and control: when portfolio management becomes operational

Monitoring and control serve to maintain alignment with objectives over time. Using appropriate techniques to track project progress allows early identification of deviations and drifts from the overall strategy. Tools such as progress matrices allow project managers to manage trends in real time as well.

Not forgetting the importance of key performance indicators, KPIs that are now at the heart of any strategy. For example, KPIs may include meeting deadlines, budget spent versus budgeted, or satisfaction of stakeholders involved. SAP Enterprise Portfolio and Project Management enables the generation of advanced KPI reports that provide a comprehensive view of projects at any instant.

Portfolio management is a valuable support for strategy

In an environment of increasingly limited resources and tightening requirements, it is necessary to ensure consistency between projects and the company’s strategy. Each project must contribute to achieving the long-term vision and goals. Effective portfolio management makes it possible to optimize resources and create opportunities for growth and better governance of innovation.
SAP Enterprise Portfolio and Project Management, with its ability to converge data into functional and effective information and analytical tools, enables portfolio management with this in mind.

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